COVID-19: Governors Meet Over Reopening Of Economy, Other Issues

A file photo of members of the NGF at a meeting in Abuja in January 2020.

 

Members of the Nigeria Governors’ Forum (NGF) met on Wednesday to discuss issues affecting the country, including the impact of the coronavirus (COVID-19) pandemic on Nigerians and the economy.

At the meeting which held virtually and was presided by the NGF Chairman and Ekiti State Governor, Kayode Fayemi, the governors resolved to approve the work of the NGF Sub-Committee interfacing with the Presidential Task Force (PTF) on COVID-19, to consolidate measures to gradually open the formal and informal sectors of the economy.

Delta State Governor, Ifeanyi Okowa, who is the chairman of the committee, had briefed the Forum on steps taken to provide a coordinated strategy between the Federal and state governments to ease the lockdown and open the economy.

His counterpart in Kaduna State, Governor Nasir El-Rufai, also provided an update on the implementation of the final report of the NEC Ad-Hoc Committee on COVID-19 “Containing the Outbreak and Responding to the Adverse Economic Effects,” which was presented to the Vice President and Chairman of the Committee, Professor Yemi Osinbajo, in March.

Governor El-Rufai, who is the Chairman of the NGF Sub-Committee on COVID-19, informed his colleagues that the recommendations of the report have been integrated into the Nigeria Economic Sustainability Plan (ESP).

He also outlined the cross-cutting imperatives for a post-COVID economic recovery, including a unique identity system for Nigeria, broadband connectivity, and investment in the manufacturing of pharmaceutical generics.

Others are research and development, as well as institutional reforms for the National Health Insurance Scheme (NHIS) along the lines of PENCOM.

 

In their resolution, the governors endorsed the work of the sub-committee and resolved to engage with the Vice President to facilitate states’ representation in the implementation committee of the Nigeria Economic Sustainability Plan.

They also called for the revitalisation of the Nigeria’s Mortgage Bank to support the government’s housing programme, as well as the importance of the N2 trillion Nigeria Infrastructure Investment Fund to stimulate the economy.

Concerned about the rate of the community spread of COVID-19 cases with mild or no symptoms, the NGF urged the state governments to ramp up testing to curb the spread of the virus.

Read the communique issued at the end of the meeting below:

ISSUED AT THE END OF THE 12th COVID-19 TELECONFERENCE MEETING OF THE NIGERIA GOVERNORS’ FORUM HELD ON WEDNESDAY, 8th JULY 2020

We, members of the Nigeria Governors’ Forum (NGF), at our meeting held today, Wednesday, 8th July 2020 deliberated on issues affecting the country including the impact of the COVID-19 pandemic.

The NGF Chairman provided an update on:

The World Bank Regional Disease Surveillance Systems Enhancement (REDISSE) programme which is a US$100 million COVID-19 support from the federal government to fund health mitigation measures across states.

The Fund comes at a critical time as the impact of COVID-19 prolongs and when State governments prepare for the reopening of the economy, and it will support broader mitigation measures required to ensure seamless easing of the lockdown across States.

The COVID19 pandemic and the new strategy being rolled out by the Presidential Taskforce (PTF) to address the spread of the pandemic.

LGAs with a high burden of diseases (hotspot) have been identified and targeted with interventions such as increased testing, and promotion of non-pharmaceutical intervention including hand hygiene, respiratory etiquette, mandatory masking in public, and partial or total lockdown restricting movement.

The PTF will reach out and work with the Governors of the respective States to implement the strategy.

Other matters of concern including deductions from the federation account to fund the North East Development Commission (NEDC); stamp duty collection; ownership of the Nigeria LNG Limited (NLNG); as well as the contentious Executive Order 10.

The Forum also received updates and presentations from:

The Governor of Delta State, Dr Ifeanyi Arthur Okowa, Chairman of the NGF Sub-Committee interfacing with the Presidential Task Force (PTF) on COVID-19 to provide a coordinated strategy between the Federal and State governments to ease the lockdown and open the economy.

The Governor of Kaduna State, Mallam Nasir El-Rufai, Chairman of the NGF Sub-Committee on COVID-19 who provided an update on the implementation of the Final Report of the NEC Ad-Hoc Committee on COVID-19 “Containing the Outbreak and Responding to the Adverse Economic Effects” which was presented to the Vice President and Chairman of the Committee, Professor Yemi Osinbajo in March 2020.

The Governor noted that the recommendations of the report have been integrated into the Nigeria Economic Sustainability Plan (ESP).

He also highlighted cross-cutting imperatives for a post-COVID economic recovery, including a unique identity system for Nigeria; broadband connectivity; investment in the manufacturing of pharmaceutical generics; research and development; as well as institutional reforms for the National Health Insurance Scheme (NHIS) along the lines of PENCOM.

Engr. Nuruddeen Rafindadi, Managing Director, Chief Executive Officer of the Federal Roads Maintenance Agency (FERMA) who made a presentation on FERMA’s Road Maintenance Programme and Challenges.

Oliver Stolpe, Country Representative of the United Nations Office on Drugs and Crime (UNODC) in Nigeria and Dr Yemi Kale, Statistician-General, National Bureau of Statistics (NBS) presented findings of the second Corruption Survey in Nigeria, which showed that the incidence of bribery has decreased since 2016 when the survey was first conducted, from 32.3% to 30.2%.

The Minister of State for Petroleum Resources, Timipre Sylva also addressed the Forum on the National Gas Expansion Programme (NGEP) which is designed as a catalyst to adding value to the vast natural gas reserves in Nigeria.

The plan will also spur revitalisation across gas-based industries in fertilizer, methanol, textiles, and feedstock for industries.

Thereafter, members of the Nigeria Governors’ Forum resolved as follows to:

Endorse the work of Governor Okowa’s Committee to consolidate measures to gradually open the formal and informal sectors of the economy.

Endorse the work of the El-Rufai Committee and resolved to engage with the Vice President and Chairman of the National Economic Council, Professor Yemi Osinbajo, to facilitate States’ representation in the implementation committee of the Nigeria Economic Sustainability Plan.

Members also advocated for the need to revitalise Nigeria’s Mortgage Bank to support the government’s ambitious housing programme, and the importance of the N2 trillion Nigeria Infrastructure Investment Fund to stimulate the economy.

Collaborate with the Ministry of Petroleum Resources and FERMA to ensure the implementation of the 5% user charge on the pump price of petrol and the international vehicle transit charge to better fund road projects in Nigeria.

Although the second corruption survey focused on federal government agencies, members resolved to collaborate with UNODC to strengthen public complaints mechanisms across State MDAs given that state institutions, businesses, and households are affected by bribe seeking among public sector officials.

Collaborate with the Ministry of Petroleum Resources to support the implementation of the National Gas Expansion Programme through a state-wide adoption of liquefied petroleum gas (LPG); easing gas pipeline right of way applications; and encouraging the micro stove assembly for small businesses, including facilitating training for gas operators.

Finally, given the rise in the community spread of coronavirus cases with mild or no symptoms, State governments are encouraged to ramp up testing to curb the spread of the virus especially amongst those with pre-existing conditions and the elderly.

Governor Kayode Fayemi

Chairman, Nigeria Governors’ Forum

8th July 2020

Eurozone Economy To Crash 8.7% In 2020 – EU Forecast

 

The eurozone economy will plunge 8.7 percent in 2020 due to the coronavirus crisis, the European Commission said Tuesday in more pessimistic forecasts that do not see a complete rebound next year.

The new forecasts see the eurozone economy bouncing back by 6.1 percent in 2021, still leaving the region worse off than before the countries were forced to implement lockdowns in an attempt to contain the spread of COVID-19.

“The economic impact of the lockdown is more severe than we initially expected,” said Commission Vice President Valdis Dombrovskis in a statement accompanying the release of the updated forecasts.

“Looking forward to this year and next, we can expect a rebound but we will need to be vigilant about the differing pace of the recovery,” he added.

Germany, the EU’s biggest economy, is expected to see a 6.3 percent contraction this year and 5.3 percent growth in 2021.

The economies of France, Italy and Spain will each contract by more than 10 percent, and then partially recover.

France, the eurozone’s second-largest economy, is expected to contract by 10.6 percent this year and grow by 7.6 percent in 2021.

Italy, which should suffer a 11.2-percent drop this year, is only forecast to rebound by 6.1 percent in 2021.

Spain’s economy is seen as contracting by 10.9 percent before bouncing back by 7.1 percent.

“The policy response across Europe has helped to cushion the blow for our citizens, yet this remains a story of increasing divergence, inequality and insecurity,” said the EU’s economy commissioner, Paolo Gentiloni.

“This is why it is so important to reach a swift agreement on the recovery plan proposed by the Commission –- to inject both new confidence and new financing into our economies at this critical time,” he added.

AFP

UK Economy Suffers Worst Quarterly Slump Since 1979

A sign painted on the ground reminds people to practice social distancing as a precaution against the spread of COVID-19 in the centre of Leicester, central England, on June 29, 2020. – The central English city of Leicester could be the country’s first to face a local lockdown due to a rise in coronavirus cases, the UK’s Home Secretary Priti Patel said on June 28. Ben STANSALL / AFP.

 

Britain’s economy has suffered its biggest quarterly contraction for more than 40 years as the coronavirus pandemic slashed activity, revised official data showed Tuesday.

Gross domestic product shrank 2.2 percent in the first quarter, or January-March period, compared with the prior three months, the Office for National Statistics said in a statement giving a second estimate.

The initial figure given by the ONS showed a GDP contraction of 2.0 percent in the first quarter, or worst reading since the global financial crisis in 2008.

Second-quarter data will show the full impact of coronavirus because Britain’s nationwide coronavirus lockdown was only imposed on March 23.

Recent official figures had showed UK economic activity crashed by a record 20.4 percent in April.

“Our more detailed picture of the economy in the first quarter showed… the largest quarterly fall since (the third quarter of) 1979,” said ONS deputy national statistician Jonathan Athow.

“All main sectors of the economy shrank significantly in March as the effects of the pandemic hit.”

Athow added however that “the sharp fall in consumer spending at the end of March led to a notable increase in households’ savings”.

This has been helped further by the government paying the bulk of private-sector workers’ wages during the pandemic to keep them in jobs.

Economists meanwhile anticipate a double-digit slump in output during the second quarter or April-June period, placing Britain in a technical recession.

“It is evident that the UK economy witnessed a record GDP contraction in the second quarter,” said Howard Archer, economist at EY, which is forecasting a 17-percent slump before a 10-percent rebound in the third quarter.

The Bank of England has warned that COVID-19 paralysis could spark the nation’s worst recession in centuries, after the coronavirus slammed economies worldwide.

Earlier this month, the BoE unveiled an extra £100 billion ($126 billion, 112 billion euros) of cash stimulus to prop up Britain’s coronavirus-hit economy.

It had already reacted by slashing its main interest rate to a record-low 0.1 percent and pumping £200 billion into the economy to get retail banks lending to fragile businesses.

AFP

South Africa Economy Contracts Two Percent In First Quarter

A queue of cars are seen at the Maseru Bridge border post between Lesotho and South Africa on March 24, 2020. Molise Molise / AFP.

 

The economy of South Africa, the continent’s most advanced, shrunk by two percent in the first quarter of this year, its third consecutive quarterly decline, official statistics showed Tuesday.

StatsSA said mining and manufacturing were the biggest drags on overall economic activity — with the mining and quarrying sectors shrinking by 21.5 percent.

The manufacturing industry contracted by 8.5 percent.

Overall, the economy is projected to shrink by 7.2 percent in 2020 as a result of the coronavirus pandemic, the deepest slump in 90 years, Finance Minister Tito Mboweni said last week.

The latest figures do not reflect the impact of the coronavirus which only started in March, leading to the shutdown of the country from March 27.

South Africa which has the highest recorded number of coronavirus infections in sub-Saharan Africa, with 144, 264 cases, including 2,529 fatalities.

The government has been gradually easing the lockdown in phases, but the numbers of infections are climbing fast with the Health Minister Zweli Mkhize warning that the country is yet to reach its peak.

AFP

COVID-19 Crisis Sinks Global Economy In 2020, Collapsing GDP 4.9% – IMF

In this file photo an exterior view of the building of the International Monetary Fund (IMF), with the IMG logo, is seen on March 27, 2020 in Washington, DC. Olivier DOULIERY / AFP
In this file photo an exterior view of the building of the International Monetary Fund (IMF), with the IMG logo, is seen on March 27, 2020 in Washington, DC. Olivier DOULIERY / AFP

 

The global coronavirus pandemic has sparked an economic “crisis like no other,” sending world GDP plunging 4.9 percent this year and wiping out $12 trillion over two years, the IMF said Wednesday.

Worldwide business shutdowns destroyed hundreds of millions of jobs, and major economies in Europe face double-digit collapses.

The prospects for recovery post-pandemic — like the forecasts themselves — are steeped in “pervasive uncertainty” given the unpredictable path of the virus, the IMF said in its updated World Economic Outlook.

“The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast,” the fund warned.

While businesses are reopening in many countries and China has seen a bigger rebound in activity than expected, a second wave of viral infections threatens the outlook, the report said.

World GDP is expected to rebound by just 5.4 percent in 2021, and only if all goes well, the IMF warned.

– Poor most vulnerable –

IMF chief economist Gita Gopinath said under current forecasts, the crisis will destroy $12 trillion over two years, and cautioned, “we are not out of the woods.”

“Substantial joint support from fiscal and monetary policy must continue for now,” Gopinath said in a blog post.

The downturn is particularly damaging for low-income countries and households, and threatens to endanger the progress made on reducing extreme poverty, the Washington-based crisis lender said in its report.

READ ALSO: Millions Of Migrant Workers Head Home Due To Coronavirus – UN

The fund made drastic downward revisions to most of the April forecasts made in the early days of the pandemic, and IMF economists fear the coronavirus will leave lasting scars on employment, businesses and trade.

Hanging over the predictions is the bill for massive government stimulus plans, which were fueled by extremely low interest rates and likely prevented the recession from turning into a depression even as they created huge and ever-increasing debt levels.

– Drastic, downward revisions –

The damage is nonetheless stunning, and more widespread than any downturn in recent decades. The recession in many major economies will be more than double that suffered during the global financial crisis in 2009, which came as major developing economies like China, India and Brazil were booming.

China will eke out growth of one percent this year, the only positive figure on the long list of key economies the IMF tracks.

The United States will shrink eight percent and Germany slightly less, while France, Italy, Spain and Britain will suffer double-digit contractions. Japan makes out a bit better with a drop of just 5.8 percent, according to the forecasts.

Mexico also will see a double-digit decline while Brazil just misses that mark, as does Argentina, which is in the middle of a massive debt crunch on top of its health and economic crises after the country once again defaulted on its foreign obligations.

The IMF pointed to International Labour Organization data estimating more than 300 million jobs were lost in the second quarter of the year.

The “sizeable” flood of government funds to support workers and businesses “have forestalled worse near-term losses,” but the IMF urged countries to avoid a situation where aid is “prematurely withdrawn or improperly targeted” since that could worsen the economic damage.

“A more prolonged decline in activity could lead to further scarring, including from wider firm closures, as surviving firms hesitate to hire jobseekers after extended unemployment,” the fund warned.

– Trade hit, recovery weak –

With transport and manufacturing shut down for weeks, the IMF projects global trade volume will collapse by just under 12 percent — and advanced economies will see an even more dramatic drop.

The IMF also warned of dangers posed by eroding relations between and within countries.

“Beyond pandemic-related downside risks, escalating tensions between the United States and China on multiple fronts, frayed relationships among the Organization of the Petroleum Exporting Countries (OPEC+) coalition of oil producers and widespread social unrest pose additional challenges to the global economy,” the report said.

Trade disruptions could undermine productivity as firms shift supply chains to try to protect themselves against future breakdowns, and companies also face higher costs as they adopt enhanced cleaning procedures and social distancing requirements.

Amid the uncertainty, there is a chance the recession could be less severe than forecast, the report said.

“Downside risks, however, remain significant,” it warned.

AFP

South Africa’s Unemployment Rate Tops 30%

Commuters wearing masks as a preventive measure against the spread of the COVID-19 coronavirus queue at the Bara taxi rank in Soweto, Johannesburg, on June 1, 2020. South Africa moved into level three of a five-tier lockdown on June 1, 2020, to continue efforts to curb the spread of the COVID-19 coronavirus. Under level three, all but high-risk sectors of the economy will be allowed to reopen. Michele Spatari / AFP.

 

South Africa’s unemployment rate jumped rose one percentage point to 30.1 percent in the first quarter of this year compared to the final three months of 2019, official data showed Tuesday.

The new data is a far cry from what analysts expect to be the ultimate fallout from the coronavirus which has infected more than 100,000 people in Africa’s most developed economy.

The number of unemployed came to 7.1 million, with the formal sector shedding the most jobs, StatsSA said.

“Most industries experienced job losses in the first quarter of 2020, compared to the fourth quarter of 2019,” the statistics agency said, adding the finance sector lost 50,000 jobs.

President Cyril Ramaphosa on Monday warned of mass job losses and “tough times” ahead as the continent’s most industrialised country braces for the economic fallout from its strict anti-coronavirus measures.

Ramaphosa imposed a strict lockdown on March 27 to try to limit the spread of COVID-19 and prepare hospitals for an expected surge in cases.

READ ALSO: Global Trade Set To Shrink 18.5% In Q2, Defying Worst Fears – WTO

But the move has cost the economy dearly. South Africa was already in recession when the virus arrived.

The central bank now forecasts the economy will shrink seven percent in 2020 as the economy buckles under the coronavirus pandemic.

Since last month the government has started loosening the lockdown to enable business activity to resume gradually.

“For a country such as ours, which was already facing an unemployment crisis and weak economic growth, difficult decisions and difficult days lie ahead,” Ramaphosa said in his weekly newsletter.

Companies, including the public broadcaster SABC, last week announced plans to lay off staff.

The South African Chamber of Commerce and Industry has warned that the unemployment rate could rise as high as 50 percent due to the pandemic.

AFY

Eurozone Business Decline Slows As Lockdown Eases – PMI Survey

Eurozone

 

Private sector economic activity in the eurozone shrank further in June but the rate of decline has slowed compared to the height of the coronavirus lockdown, IHS Markit said Tuesday.

The firm’s closely-watched PMI index rose to 47.5 points from 31.9 in May and a historic low of 13.6 in April but was still below the key 50 points level, which represents a contraction.

“Output and demand are still falling but no longer collapsing,” said Chris Williamson, chief business economist at IHS Markit.

“While second quarter GDP is still likely to have dropped at an unprecedented rate, the rise in the PMI adds to expectations that the lifting of lockdown restrictions will help bring the downturn to an end as we head into the summer.”

Jessica Hinds, European economist at independent analysts Capital Economics, said the survey “suggests that while the GDP outturn will undoubtedly be dreadful, it will not be as catastrophically bad as we had feared.”

Of the 19-nation single currency zone’s largest players, France actually moved into positive territory but giant Germany’s weaker score held the average down.

READ ALSO: Global Trade Set To Shrink 18.5% In Q2, Defying Worst Fears – WTO

“Overall, today’s data provide some reassurance that the economy is getting back on its feet,” Hinds said.

“But with some restrictions still in place and fears of a second wave lingering, it will be some time before activity returns to pre-virus levels.”

As the coronavirus outbreak swept the world in the first half of 2020, eurozone countries and their main partners in the rest of the EU and Britain, imposed lockdowns.

Many businesses and social and cultural life ground to a halt, hammering the economy, but the measures have been credited with getting the epidemic under control.

Governments are now moving — with caution and at varying rates — to return life to normal, hoping to revive businesses and travel in time for the summer tourism season.

AFP

Merkel Urges EU Recovery Deal Before End Of July

German Chancellor Angela Merkel gives a press conference on March 11, 2020 in Berlin to comment on the situation of the spread of the novel coronavirus in the country. AFP

 

German Chancellor Angela Merkel on Thursday urged the European Union to reach an agreement on a recovery plan worth 750 billion euros ($843 billion) by the end of July to kickstart an economy battered by the coronavirus pandemic.

“It would be best if we could reach an agreement before the summer break,” Merkel said, calling for compromise from member states to enable the deal to be ratified by the end of the year.

“We must act quickly and decisively,” she said.

European Commission chief Ursula von der Leyen proposed the huge fund to help the EU out of its deepest-ever recession, but the plan was immediately met with fierce opposition from fiscally conservative member states including Austria and the Netherlands.

The proposed package consists of 500 billion euros in grants and 250 billion euros in loans, but requires unanimous EU approval.

“The starting position is far from easy but I hope that all member states will act in a spirit of compromise in the face of this unprecedented situation,” Merkel said.

READ ALSO: EU Hopes US Pullout Of Digital Tax Talks Not ‘Definitive’

“Cohesion and solidarity have never been more important than today. The crisis can only be overcome if we act for and with each other,” she said.

The European Council is due to hold a video summit on June 19 on the controversial stimulus package, the EU’s largest to date.

However, a decision is not expected until the leaders have met in person, said Merkel, whose country assumes the EU presidency in July.

The German chancellor had in late May stunned observers by proposing along with French President Emmanuel Macron the plan for 500 billion euros in grants to help the hardest hit EU members to get their economies back on track.

That proposal, now making up the bulk of von der Leyen’s package, shattered a long-standing German taboo as it included taking on shared debt, a dramatic U-turn after years of obstinate German opposition to joint borrowing.

AFP

Greece Extends Migrant Camp Lockdown

A woman wearing a protective face mask stands out of the Attikon University Hospital in Athens on February 27, 2020. - The Greek health ministry said a boy whose 38-year-old mother is already hospitalised with the virus after returning from a trip to northern Italy where there are several cases of the virus had also tested positive in Thessaloniki. The boy's school in Thessaloniki will be shut for two weeks and his entire class will stay at home, the school's principal told state TV ERT. (Photo by Angelos CHRISTOFILOPOULOS / AFP)
A woman wearing a protective face mask stands out of the Attikon University Hospital in Athens on February 27, 2020. – The Greek health ministry said a boy whose 38-year-old mother is already hospitalised with the virus after returning from a trip to northern Italy where there are several cases of the virus had also tested positive in Thessaloniki. Angelos CHRISTOFILOPOULOS / AFP.

 

Greece has extended for another two weeks a coronavirus lockdown on its overcrowded migrant camps as the country gears up to revive its tourism-dependent economy.

“For residents of the reception and identification centres across the country, measures against the propagation of the COVID-19 virus are extended” until June 21, the official Government Gazette said.

Greece appears to have fared better than most of its European partners in the coronavirus pandemic, with 180 deaths and 2,980 cases.

It was quick to introduce strict confinement measures on migrant camps on March 21 and imposed a more general lockdown on March 23.

More than 33,000 asylum seekers live in the five camps on the Aegean islands, with a total capacity of 5,400 people, and some 70,000 in other facilities on the mainland.

While no known deaths have been recorded in the camps so far due to COVID-19 and only a few dozen infections, the measures have since been extended a number of times.

Rights groups have expressed concern that migrants’ rights could be eroded by the anti-virus restrictions.

Massive virus screening in the camps only started in early May.

READ ALSO: Britain To Reopen Places Of Worship On June 15

The new extension to the lockdown on the camps comes after Greek Prime Minister Kyriakos Mitsotakis unveiled a new tourism campaign, saying: “We are opening Greece’s windows and doors to the world gradually but with optimism.”

Greece has announced a “transition phase” between June 15 and 30, during which airports in Athens and Thessaloniki will again receive regular passenger flights.

Other regional and island airports are to open on July 1.

Greece plans to impose a quarantine of between seven and 14 days on travellers from only the hardest-hit areas as identified by the European Union Aviation Safety Agency (EASA).

However, sample tests will also be carried out at entry points for epidemiological purposes.

AFP

Trump Says US Economy Back To ‘Rocket’ Mode After Good Jobs Report

In this file photo US President Donald Trump gives a thumbs up during a "Keep America Great" campaign rally at Wildwoods Convention Center in Wildwood, New Jersey, January 28, 2020.
In this file photo US President Donald Trump gives a thumbs-up during a “Keep America Great” campaign rally at Wildwoods Convention Center in Wildwood, New Jersey, January 28, 2020.

 

President Donald Trump declared the US economy in “rocket” mode Friday after data showed a surprising recovery in the coronavirus-ravaged jobs market — lifting his own sinking reelection chances in the process.

“This is a rocket ship,” Trump said in a hastily convened celebratory statement in the White House’s Rose Garden.

Where markets had been bracing for yet another worsening in the unemployment rate, the Labor Department said that 2.5 million jobs were instead added in May. That brought the jobless rate from 14.7 to 13.3 percent — not up to the feared 20 percent or higher.

Despite calling a press conference, Trump took no questions from reporters about the coronavirus pandemic and nationwide unrest over the brutal death in police custody of a black man, George Floyd.

Trump clearly didn’t want to mar the good news on jobs, which he hopes will provide a path to regaining his once seemingly solid march toward a second term in November.

After months of criticism over his hit-and-miss handling of the pandemic and outrage among even some top former aides over his suggestion of a military crackdown or police brutality against protesters, Trump is at the lowest ebb of his presidency. Polls show him losing to Democratic challenger Joe Biden.

Now with hard data to back his prediction that economic devastation from the coronavirus shutdown will quickly ease, Trump feels his political mojo coming back.

“We’ve made every decision correctly,” he stated in a blanket dismissal of critics who say his management has ranged from incomplete to shambolic.

“We had the greatest economy in the history of the world. And that strength let us get through this horrible pandemic, largely through, I think we’re doing really well,” he said.

Trump then flew off for the day to Maine, a state he hopes will help carry him over the top in a tight race against Biden.

Coronavirus out, jobs in

The Labor Department attributed the job improvements to “a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it.”

However, as it has for the past two months, the Labor Department said the jobless rate was likely three points higher due to errors in how workers described their job status.

A separate report showing state data on weekly initial claims for unemployment benefits showed over 42 million people have lost their jobs, at least temporarily, since mid-March when the shutdowns to contain the spread of COVID-19 began.

But with a massive $3 trillion infusion of government aid, and trillions more in lending to businesses, economists say it is likely firms were able to bring workers back.

“If this sticks, and my guess is it will, we’re seeing a faster reopening than most expected, and a quicker unleashing of pent-up demand,” economist Jared Bernstein of the Center on Budget and Policy Priorities said on Twitter.

‘Easy part’ over?

Ian Shepherdson of Pantheon Macroeconomics, one of few who anticipated positive news in the jobs data, called the report, “The biggest payroll surprise in history, by a gigantic margin.”

Gains were especially sharp in leisure and hospitality, construction, retail trade and education and health services, according to the data.

The number of workers on temporary layoff declined by 2.7 million to 15.3 million, in a sign people have been able to return to their jobs now that social distancing and lockdown rules are easing nationwide.

But Harvard economist Jason Furman noted that the reduction in temporary layoffs was “the easy part of the recovery,” and further job gains may come more slowly.

The data also reflect the time before the killing of Floyd and the ensuing nationwide protests, some of which deteriorated into widespread looting and arson.

Australia Heading For Recession After Economy Contracts

A woman walks past a sale sign in a department store in Melbourne’s central business district on June 3, 2020. – Australia is heading for its first recession in nearly three decades after the economy shrunk in the January-March quarter, with a “far more severe” reading expected in the next three months as the effects of the virus shutdown bite. William WEST / AFP.

 

Australia is heading for its first recession in nearly three decades after the economy shrunk in the January-March quarter, with a “far more severe” reading expected in the next three months as the effects of the virus shutdown bite.

The 0.3 percent contraction was the first quarterly drop since 2009 during the global financial crisis and came as the lockdown exacerbated the impact of a prolonged drought and massive bushfires.

And while it was smaller than the forecast 0.4 percent drop, Treasurer Josh Frydenberg said Australia was now on track to enter its first recession since 1991 “on the basis of the advice that I have from the Treasury Department about where the June quarter is expected to be”.

“The economic impact will be severe. Far more severe than what we have seen today,” Frydenberg said.

Authorities ordered numerous businesses shut and closed the country’s international borders to stem the spread of COVID-19, costing the economy billions of dollars but achieving success in containing the virus.

Frydenberg said the negative March quarter “compared very well” to results in countries including China, France and Britain, showing the Australian economy’s “remarkable resilience”.

READ ALSO: Italy Reopens To Tourists From Europe

“We were on the edge of the cliff. What we were facing was an economist’s version of Armageddon,” he said.

“We have avoided the economic fate, and the health fate, of other nations because of the measures that we have taken as a nation.”

The government has effectively bankrolled swathes of the economy — subsidising wages and urging rent deferrals in order to keep businesses on life support until normal life returns.

Millions of Australians have lost their jobs or seen hours slashed, but officials hope a three-stage approach to lifting virus restrictions will help restore the economy.

National Australia Bank’s Kaixin Owyong said the economy would likely shrink 8.4 percent in the next three months.

But she added that the lifting of restrictions earlier than expected “points to economic recovery beginning in the third quarter, with high-frequency indicators… showing spending is picking up as restrictions are eased”.

She did, however, warn that a full rebound was some time off as borders were still closed, which will continue to hit trade.

“Full recovery will also require confidence in health and economic outcomes to be restored, where households may remain cautious for some time given record job losses and with the labour market historically lagging recovery in activity,” she added.

Australia has recorded about 7,200 cases and 102 deaths from coronavirus, with many regions now regularly reporting zero new daily cases.

AFP

French Economy To Shrink 11% This Year – Minister

French Finance and Economy Minister Bruno Le Maire (C) gives a press conference following his meeting with employers and professionals organisations at the Economy Ministry in Paris on December 3, 2018. ERIC PIERMONT / AFP

 

The French economy is expected to shrink 11 percent this year because of the coronavirus crisis, a “brutal” shock and worse than the government’s previous forecast of an eight percent contraction, Finance Minister Bruno Le Maire said Tuesday.

“The shock is very brutal,” Le Maire told RTL radio, though he said that “I am absolutely certain that we are going to bounce back in 2021.”

The business closures and confinement orders to halt the COVID-19 pandemic had left the economy gasping for air, he said, warning that “the hardest part is still ahead of us.”

The government has progressively revised upwards the damage caused by the pandemic and the latest estimate will be included in a recovery budget which will be submitted to ministers on June 10.

Last week, the official statistics agency INSEE warned that the economic contraction would be much larger than the government’s previous estimate of eight per cent, because the pickup as the virus lockdown was eased would only be gradual across the second half of the year.

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The government has launched a series of massive aid packages, complete with billions of euros for key sectors such as tourism, the auto industry and aviation, to keep the economy afloat and plans a major programme by September to speed up the recovery.

Officials are progressively easing the restrictions imposed to curb the coronavirus outbreak, and Le Maire also announced that traditional mid-year sales by retailers would be pushed back to July 15 instead of June 24.

He said the delay had been requested by small-business owners who needed more time to prepare after being closed for more than two months.

AFP